IT Project Management Methodology - Chapter 1

KKP34102 1.Etika dan Disiplin 2.Silibus 3.Biodata BbBiodata Nama Penuh: Umur: Negeri Asal: Daerah: No Matrik: Sekolah Menengah: Asasi/Matrikulasi/Diploma/STPM: PNGK terkini: Anda Pernah bekerja? Jenis pekerjaan: Gred yang anda target: Apa yang anda faham tentang Pengurusan Projek? Anda pernah ter...

KKP34102 1.Etika dan Disiplin 2.Silibus 3.Biodata BbBiodata Nama Penuh: Umur: Negeri Asal: Daerah: No Matrik: Sekolah Menengah: Asasi/Matrikulasi/Diploma/STPM: PNGK terkini: Anda Pernah bekerja? Jenis pekerjaan: Gred yang anda target: Apa yang anda faham tentang Pengurusan Projek? Anda pernah terlibat dengan kerja yang melibatkan pengurusan projek?  KP341 02 NETWORK PROJECT MANAGEMENT CHAPTER 1 Initiating the Project  LEARNING OBJECTIVES ◾ Describe the project life cycle (PLC) and the systems development life cycle (SDLC), and their relationship. ◾ Define what a methodology is and describe the role it serves in IT projects. ◾ Identify the phases and infrastructure that make up the IT project methodology introduced in this chapter. ◾ Develop and apply the concept of a project’s measurable organizational value (MOV). ◾ Describe and be able to prepare a business case. ◾ Distinguish between financial models and scoring models. INFORMATION TEC H N OLOGY PROJECT METHODOLOGY (ITPM) Methodology A strategic-level plan for managing and controlling the project Game plan for implementing project and product lifecycles Recommends phases, deliverables, processes, tools, and knowledge areas for supporting an IT project Must be flexible and include “best practices” learned from experiences over time. Can be Traditional (e.g.,Waterfall) Agile (e.g., X PM, SCRUM) A N IT PROJECT METHODOLO GY 5 PHASES OF THE IT PROJECT METHODOLOGY (ITPM). ◾ Phase 1: Conceptualize and Initialize ◾ Focuses on defining the overall goal of the project and objectives. (Identify alternatives) ◾ Next, the costs and benefits, as well as feasibility and risk, of each alternative are analyzed. ◾ Based upon these analyses, a specific alternative is recommended for funding. ◾ Finally, the project’s goal and the analysis of alternatives that support the goal are summarized in a deliverable called the business case. ◾ Business case is used by the management to PHASES CONTINUED ◾ Phase 2: Develop the Project C harter and D etailed Project Plan defined in terms of project’s: ◾ The Project Charter clarifies the project’s goal and defines the project’s objectives in terms of scope, schedule, budget, and quality standards. ◾ The project’s scope, schedule, budget, and quality objectives are defined in detail. ◾ Scope (what is the project scope?) ◾ Schedule (how long will it take?) ◾ Budget (how much is the cost?) ◾ quality objectives (what is the return on investment in terms of time, money?) ◾ The Project plan provides all the tactical details  ◾ Phase 3: Execute and Control the Project using approach such as the SDLC. ◾ During this phase the project PHASES team uses a particular CONTINUED approach and set of systems analysis and design tools for implementing the systems development life cycle (SDLC). ◾ In addition, the project manager must ensure that the environment and infrastructure support the project.  ◾ Phase 4: Close Project ◾ After the information system has been developed, tested, and installed, a formal acceptance should transfer control from the project team to the client or project sponsor. ◾ The project team should prepare PHASES a final project report and CONTINUED presentation to document and verify that all the project deliverables have been completed as defined in the project’s scope.  ◾ Phase 5: Evaluate Project Success ◾ First, a “postmortem,” or final project review, should be conducted by the project manager and team. ◾ Second, an evaluation between the project manager and the individual project PHASES team members is conducted. CONTINUED ◾ Third, an outside third party should review the project, the project manager, and project team. ◾ Fourth, the project must be evaluated in order to determine whether the project provided value to the organization.  IT PROJECT MANAGEMENT FOUNDATION A process is a series of activities that produces a result ◾ Project Management Processes ◾ Initiating processes—to start or initiate a project or phase once commitment is obtained. ◾ Planning processes—to develop and maintain a workable plan to support the project’s overall goal. ◾ Executing processes—to coordinate people and other resources to execute the plan. ◾ Controlling processes—to ensure proper control and reporting mechanisms are in place so that progress can be monitored, problems identified, and appropriate actions taken when necessary. ◾ Closing processes—to provide closure in terms of a formal IT PROJECT MANAGEMENT FOUNDATION Project Objectives Project will have several objectives. These objectives support the overall goal and may be defined in terms of the project’s scope, schedule, budget, and quality Tools - e.g. Microsoft Project ®, C omputer Aided Software Engineering (CASE) Infrastruct ure Organizational Infrastructure IT PROJECT Project Infrastructure Project Environment MAN AGEME Roles and Responsibilities of team NT members Processes and C ontrols FOUNDATIO Technical Infrastructure Project Management Knowledge N Areas (9 areas) Definitio an analysis of the n of organizational value, feasibility, costs, Busines benefits, and risks of the project plan. s Case: However not a budget or the project plan! THE BUSINE Attribut Details all possible impacts, costs, and benefits SS es of a Clearly compares CASE alternatives Good Objectively includes all Business pertinent information Case Systematic in terms of summarizing findings PROCESS FOR DEVELOPING THE BUSINESS CASE DEVELOPING THE BUSINESS C ASE Step 1: Select the Core Team Group of people to develop business case (user, stakeholders, IT pro) Advantages: Credibility Alignment with organizational goals Access to the real costs Ownership Agreement Bridge building  ◾ Step 2: D efine Measurable DEVELOPIN Organizational Value (MOV) the project’s overall goal G THE ◾ The goal of a project becomes the BUSINESS project’s measure of success CASE ◾ In the ITPM, the project overall goal and measure of success is referred as M O V ◾ MO V ◾ Must be measurable ◾ Measurement provides focus for the project team in terms of its action ◾ Achieve specific performance target with the IT project ◾ Provides value to the organization ◾ Technology is only a tool, IT enables org. MEASURABLE to do things ORGANIZATION ◾ Must be agreed upon AL VALUE (MOV) ◾ All stakeholder and user agreed and understand the MO V ◾ Must be verifiable at the end of the project ◾ To determine the success of the project ◾ Guides the project throughout its life cycle ◾ Should align with the organization’s  Organization al Drive s THE IT Vision & Mission Suppor Organizatio nal Strategy Drive s VALU ts Project’s E Suppor Organizatio nal Measurable CHAI N ts Value (MOV) PROCESS FOR DEVELOPING THE MO V 1. Identify the desired area of impact Potential A reas: Strategic Penetration of new market Customer Customer have many choices, better product Financial Increased profit Operational Effective operation at lower cost Social Education, safety, environment  PROCESS FOR DEVELOPING THE MO V 2. Identify the desired value of the IT project Organizational Value: Better—What does the organization want to do better? (For example, improve quality or increase effectiveness?) Faster— W hat does the organization want to do faster? (Increase speed, increase efficiency, or reduce cycle times?) Cheaper — What does the organization want to do cheaper? (Reduce costs?) Do more— W hat does the organization want to do more than it is currently? (Growth or expansion?) PROCESS FOR DEVELOPING THE MO V 3. Develop an Appropriate Metric  Should it increase or decrease? Metrics: Money ($, £, ¥ ) Percentage (%) Numeric Values Example : 20% return on investment and 500 new customers PROCESS FOR DEVELOPING THE MO V 4. Set a time frame for achieving the MO V  When will the MO V be achieved? PROCESS 5. Verify and get agreement from the project stakeholders FOR  Project manager and team can only guide the DEVELOPIN process G THE MOV  PROCESS FOR DEVELOPING THE MO V 6. Summarize the M OV in a clear, concise statement or table This project will be successful if ?. M OV:The B2C project will provide a 20% return on investment and 500 new customers within the first year of its operation Year MOV 1 20% return on investment 500 new customers 2 25% return on investment 1,000 new customers 3 30% return on investment 1,500 new customers Example M OV Using Table Format PROJECT GOAL ? INSTALL N EW HARDW ARE AN D RESPO N D TO 95% OF OUR SOFTW ARE TO IMPRO VE OUR CUSTOMERS’ I N Q UIRIES W I T H I N CUSTOMER SERVICE TO W ORLD CLASS 90 S E C O N D S W ITH LESS THAN LEVELS 5% C A LLBA C K S ABOUT THE S A M E PRO BLEM. (MOV)  I believe that this nation should commit itself to achieving the goal before this decade is out, of landing a man on the moon and A REALLY returning him safely to Earth. GOOD GOAL John F. Kennedy (May 25, 1961)  ◾ Step 3: Identify Alternatives ◾ The base case alternative is what the organization will do if no project is undertaken.That is – maintain the status quo (remain the current state) and do not pursue any options described in the business case. DEVELOPIN Possible Alternative Strategies ◾ Change existing process without G THE investing in IT BUSINESS ◾ Adopt/Adapt systems from other organizational areas CASE ◾ Reengineer Existing System ◾ Purchase off-the-shelf Applications package ◾ Custom Build New Solution  Step 4: Define Feasibility and Assess Risk Feasibility – The project viable and worth doing DEVELOPIN Economic feasibility G THE Technical feasibility BUSINESS Organizational feasibility Other feasibilities CASE Risk should focus on: Identification—What can go wrong? What must go right? Assessment— What is the impact of each risk? Response—How can the organization avoid or minimize the risk?  Step 5: D efine Total Cost of Ownership ◾ (TCO) refers to the total cost of acquiring, developing, maintaining, and supporting the application system over its useful life.TCO includes such costs as: DEVELOPIN ◾ Direct or up-front costs—Initial G THE purchase price of all hardware, software, and telecommunications BUSINESS equipment, all development or installation costs, outside consultant CASE fees, etc. ◾ Ongoing costs—Salaries, training, upgrades, supplies, maintenance, etc. ◾ Indirect costs—Initial loss of productivity, time lost by users when the system is down, the cost of auditing equipment (i.e., finding out who has what and where), quality assurance, and post implementation  Step 6: Define Total Benefits of Ownership ◾ (TBO) include all of the direct, on- going, and indirect benefits associated with each proposed alternative. DEVELOPI ◾ Increasing high-value work— For example, a salesperson may spend less time on paperwork NG THE and more time calling on customers. BUSINESS ◾ Improving accuracy and efficiency— For example, reducing errors, duplication, or the number of steps CASE in a process. ◾ Improving decision-making—For example, providing timely and accurate information. ◾ Improving customer service— For example, new products or services, faster or more reliable service, convenience, etc.  DEVELOPING THE BUSINESS C ASE Step 7: Analyze alternatives using financial models and scoring models Payback – ◾ analyzing the value of a project by determining how long it takes to recover the initial investment. Payback Period = Initial Investment Net Cash Flow = $100,000 $20,000 = 5 years  DEVELOPING THE BUSINESS C ASE Materials (putter head, shaft, grip, $12.00 Break Even - etc.) determines when the project recoups its original Labor (0.5 hours at $9.00/hr) $ investment and thus 4.50 begins to return positive Overhead (rent, insurance, utilities, $ net benefit. It is taxes, etc.) particularly useful when 8.50 returns can be calculated Total $25.00 on a per unit basis. If you sell a golf putter for $30.00 and it costs $25.00 to make, you have a profit margin of $5.00: Breakeven Point = Initial Investment / Net Profit Margin = $100,000 / $5.00 = 20,000 units DEVELOPING THE BUSINESS C ASE Return on Investment - method of determining the percentage rate of return on a project. Project ROI =(total expected benefits – total expected costs) total expected costs = ($115,000 - $100,000) $100,000 = 15%  DEVELOPING THE BUSINESS C ASE Net Present Value – Method focuses on the time value of money. A project’s NPV is equal to the sum of all of the future net cash flows that derive from the project, discounted by the firm’s required rate of return, minus the initial investment. Year 0 Year 1 Year 2 Year 3 Year 4 Total Cash Inflows $0 $150,000 $200,000 $250,000 $300,000 Total Cash Outflows $200,000 $85,000 $125,000 $150,000 $200,000 Net Cash Flow ($200,000) $65,000 $75,000 $100,000 $100,000 NPV = -I0 +  (Net Cash Flow / (1 + r)t) Where: I = Total Cost or Investment of the Project r = discount rate t = time period DEVELOPING THE BUSINESS C ASE Net Present Value Discounted Cash Time Period Calculation Flow Year 0 ($200,000) ($200,000) Year 1 $65,000/(1 +.08)1 $60,185 Year 2 $75,000/(1 +.08)2 $64,300 Year 3 $100,000/(1 $79,383 +.08)3 Year 4 $100,000/(1 $73,503 +.08)4 Net Present Value (NPV) $77,371 Criterion Weight Alternati Alternati Alternati ve A ve B ve C ROI 15% 2 4 10 Financial Payback 10% 3 5 10 NPV 15% 2 4 10 Alignment with strategic 10% 3 5 8 objectives Organizational Likelihood of achieving 10% 2 6 9 project’s MOV Availability of skilled 5% 5 5 4 team members Project Maintainability 5% 4 6 7 Time to develop 5% 5 7 6 Risk 5% 3 5 5 Customer satisfaction 10% 2 4 9 External Increased market share 10% 2 5 8 Total Score 100% 2.65 4.85 8.50 Notes: Risk scores have a reverse scale – i.e., higher scores for risk imply lower levels of risk DEVELOPING THE BUSINESS C ASE STEP 8: PROPOSE A N D SUPPORT THE RECOMMENDATION BUSINESS C ASE TEMPLATE PROJECT SELECTION A N D APPRO VAL The IT Project Selection Process The Project Selection Decision IT project must map to organization goals IT project must provide verifiable M OV Selection should be based on diverse measures such as tangible and intangible costs and benefits various levels throughout the BALANCED SCORECARD APPRO ACH REASONS BALANCED SCOREC ARD APPRO ACH MIGHT FAIL Goals for Nonfinancial improvements variables Metrics not properly negotiated not incorrectly based on identified as defined requirements primary drivers No quantitative Reliance on trial linkage between No systematic and error as a way to map non finanacial and methodology expected financial high-level goals results M OV A N D THE ORGANIZATIO N’S SCORECARD  Focuses on the processes that coordinate and control an organization’s resources, actions, and decisions to help prevent people from making bad investments, acting unethically, or doing something illegal IT G OVERNAN For many organizations, IT governance CE started with project management, but today it also includes change management, application life- cycle management, asset and resource management (i.e., IT investment/project approval), portfolio management, and security management IT GOVERNANCE BEST PRACTICES Top business Communicate Monitor projects Identify strategic managers priorities regularly value should set IT and progress clearly Organizations Many The priorities An organization priorities are often faced organizations defined by the needs to track with a stack of rely on a top IT and each project’s potential IT committee of business progress on a projects, so it is business and IT managers must regular basis to important to leaders to be protect the compare them determine how communicated value of its in terms of their the IT budget clearly to the investment business value will be spent rest of the as well as their organization to costs and ensure that potential risks everyone is aware of and understands how the governance process works THE PROJECT MANAGEMENT OFFICE (PMO) Can be a critical component for supporting IT governance Its role is to provide support and collect project- related data while providing tools and methodologies. Information collected about projects across the organization provides a means to study the organization’s portfolio of IT projects. Historical information can be used as an audit trail to conform to regulatory requirements Also can be used as a basis for estimating and conducting reality checks for projects. A PM O can become center of excellence for project management.  ◾ Points out minefields in project processes, such as time and cost estimation ◾ Enforces priorities and/or controls that keep the project on track ◾ C oordinates cross-functional projects that may stumble as a result of BENEFITS organizational politics that often arise when intra organizational boundaries are OF A PMO crossed ◾ Provides a standardized way for all projects to be planned, managed, and reported ◾ C an show the real value of projects by comparing projected costs and benefits with actual results ◾ C an coordinate more and larger projects than the organization could handle in the past ◾ Allows IT to support its requests for additional EN D